Spreading pot legalization tests employer drug policies

DENVER — Employers nationwide should keep close tabs on how recreational marijuana legalization affects employment law in Colorado, because it's likely to be legalized by the federal government within the next five years, if not sooner, thanks to a grassroots effort by supporters of legal pot use.

And depending on the outcome of a landmark case before the Colorado Supreme Court involving an employee challenging his termination after testing positive for legal off-duty use of medical marijuana, employers may find it expensive to enforce their own zero-tolerance drug use policies if employees assert similar wrongful termination claims, legal and insurance experts said during a panel discussion Tuesday at the Risk & Insurance Management Society conference in Denver.

In Brandon Coats vs. Dish Network L.L.C., a quadriplegic employee licensed to use medical marijuana is challenging his 2010 termination, after testing positive for marijuana in violation of the Englewood, Colo.-based employer's company policy. In his suit, Mr. Coats argues his termination violates the Colorado Lawful Off-Duty Activities statute that makes it a discriminatory or unfair employment practice to terminate employees engaged in lawful off-duty off-premises activities.

In addition to legal recreational marijuana use in Colorado and Washington, so far 21 states and the District of Columbia have legalized marijuana use for medicinal purposes, said Vance O. Knapp, an attorney at Sherman & Howard in Denver, who spoke on how marijuana legalization will affect employment practices during Tuesday's panel at RIMS.

Mr. Knapp predicted those states could put pressure on Congress to legalize marijuana, which is still considered a Class 1 substance in violation of the Controlled Substances Act, putting it in the same category as cocaine and heroin.

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“If you asked me in 2010 whether marijuana would be legalized on a federal level, my answer would be very different than it is today,” he said. “There are states in the deep South considering legalizing marijuana.”

Since legal sales of recreational pot began Jan. 1 in Colorado, there has been a 39% increase in the number of arrests by Denver police for driving while under the influence of drugs, said Ashley Rea Kilroy, executive director of marijuana policy for the City and County of Denver.

“It really has been sort of like the Wild West,” said Kelly Rosenberg, assistant attorney general in the Colorado Marijuana Enforcement Division.

Meanwhile, even if an employer eventually prevails in enforcing a zero-tolerance drug-use policy, “the expense to defend a wrongful termination suit, such as the Dish Network case, could easily cost you in excess of $300,000 in legal fees and costs,” Mr. Knapp said during the panel at RIMS.

He predicted in some cases employees who test positive for marijuana also will assert claims that they are not impaired at work because they have a high tolerance for THC, the active ingredient in marijuana.

“These arguments are going to make their way into wrongful termination cases. As risk managers and employers, we need to be cognizant of that,” Mr. Knapp said.

“If you have a zero-tolerance drug policy, enforce it; don't argue whether an employee is under the influence or impaired. If you base your test on reasonable suspicion, that's your one exception.”